Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.

With little time to inspect Lehman’s toxic assets, Barclays and Bank of America made it clear that any deal would be contingent on them receiving government agreeing to absorb a portion of the losses. The government had committed about $30 billion to supporting JPMorgan Chase’s emergency takeover of Bear Stearns and just last weekend put up $200 billion in its rescue of Fannie Mae and Freddie Mac.

But fearing they had created a moral hazard and already pushing its budget, Mr. Paulson and Mr. Geithner were adamant that the government would not participate in a bailout. With all sides digging in their heels, one thing was clear: Lehman was, as one participant at the meeting put it, a “Dead Bank Walking.”

Lehman's fall from grace was brutally fast. Until June, it had never even reported a quarterly loss as a public company. As recently as March, Fuld was awarded a $22 million bonus for 2007 -- a generous pay package to be sure, but one that also reflected a year in which the bank's net profit had risen 5 percent to a record $4.2 billion.

.... when I hear talking heads on TV this morning claiming socialism is alive and well in America by virtue of the federal takeover of Fannie and Freddie, I think, please, Fannie and Freddie have always been socialist institutions. This is not a market failure as so many are now claiming. It is a government failure, pure and simple.

and here:

http://www.lewrockwell.com/rockwell/fascist-creations-fdr.html

"Fannie, Freddie, Fascist" por Lew Rockwell:

They were created by FDR in 1938 to fund mortgages insured by the Federal Home Administration. They were used by every president as a means to achieve this peculiar American value that every last person must own a home, no matter what.

In other words, we are not talking about market failure .... They occupy a .... status for which there is a name: fascism. Really, that's what we are talking about: the inexorable tendency of financial fascism to mutate into full-scale financial socialism and therefore bankruptcy.